/raid1/www/Hosts/bankrupt/TCRLA

/raid1/www/Hosts/bankrupt/TCRLA_Public/180315.mbx T R O U B L E D C O M P A N Y R E P O R T E R L A T I N A M E R I C A Thursday, March 15, 2018, Vol. 19, No. 53 Headlines B O L I V I A BOLIVIA: Proposes UN, Pope as Mediators in Dispute With Chile B R A Z I L BANCO NACIONAL: S&P Affirms 'BB-' LT Global Scale Ratings ITAU UNIBANCO: Fitch Lowers Viability Ratings to 'bb' ITAU UNIBANCO: Moody's Rates Add'l. Tier 1 Cap. Securities B2(hyb) PETROLEO BRASILEIRO: June 4 Securities Settlement Hearing Set C H I L E SMU SA: Moody's Alters Outlook to Positive; Affirms B3 CFR J A M A I C A CABLE & WIRELESS: Asks Change of Period for Suspension of Trading JAMAICA: Deposit Taking Institutions Keeping Lid on NPL M E X I C O MEXICO: Candidate Plots Big Shake Up for Country's Oil Industry P A N A M A PANAMA: Second Most Important City Paralyzed by Protests P E R U INRETAIL CONSUMER: S&P Cuts CCR to 'BB' Then Withdraws Rating P U E R T O R I C O AMADO SALON DE BELLEZA: Taps Justiniano's Law Office as Attorney PRWIRELESS INC: S&P Withdraws 'CCC-' Corporate Credit Rating TOYS R US: Taps Frontline Real Estate as Real Estate Advisor V E N E Z U E L A VENEZUELA GLOBAL: Moody's Cuts Depository Receipts Rating to C - - - - - ============= B O L I V I A ============= BOLIVIA: Proposes UN, Pope as Mediators in Dispute With Chile ------------------------------------------------------------- EFE News reports that Bolivian President Evo Morales told international reporters that he expects mediators such as the United Nations and Pope Francis to oversee adherence to the International Court of Justice's ruling on his country's suit against Chile to recover coastline lost in a 19th-century war. "It would be so good if, after the ruling, certain mediators follow up (on the matter)," he said about the decision expected by yearend, according to EFE News. As reported in the Troubled Company Reporter-Latin America on Jan. 26, 2018, EFE News reports that Bolivia's president met with a group of former foreign ministers to prepare for the final phase of a sea-access case brought against Chile before the International Court of Justice in The Hague, Netherlands. * * * As reported in the Troubled Company Reporter-Latin America on Aug. 3, 2017, Moody's Investors Service has changed the outlook on Bolivia's issuer and senior unsecured bond ratings to stable from negative, and has affirmed the ratings at Ba3. =========== B R A Z I L =========== BANCO NACIONAL: S&P Affirms 'BB-' LT Global Scale Ratings --------------------------------------------------------- S&P Global Ratings affirmed its 'BB-' long-term foreign and local currency global scale ratings on Banco Nacional de Desenvolvimento Economico e Social (BNDES). S&P said, "We also affirmed our 'brAA-' national scale issuer credit rating on the bank. The outlook on both scales remains stable. At the same time, we affirmed our 'brAA-' issuer credit rating on BNDESPar. The outlook remains stable." The bank's 'bbb-' stand-alone credit profile (SACP) and the almost certain likelihood of support from the government to the bank remains unchanged. S&P said, "The ratings on BNDES reflect our view that BNDES continues to be a key government-related entity (GRE) for the sovereign. Therefore, in our view, there's as an almost certain likelihood of government support to the bank in the event of financial distress. The stable outlook on BNDES and the stable outlook on the national scale rating on BNDESPar-BNDES Participacoes S.A. are based on our outlook on Brazil, and we expect the ratings to move in tandem with those on the sovereign. BNDES' prominent economic and public-policy status means, further, that we equalize the ratings and default risk with those on the sovereign." ITAU UNIBANCO: Fitch Lowers Viability Ratings to 'bb' ----------------------------------------------------- Fitch Ratings has downgraded the Viability Ratings (VRs) of Itau Unibanco S.A. (IU) and Itau Unibanco Holding S.A. (IUH) to 'bb' from 'bb+', which remain one notch above Brazil's sovereign rating. The ratings reflect the issuers' very strong credit profile, adequate loss absorption capacity, high liquidity and stable and diversified funding base. Fitch believes that these entities will be able to withstand a further deterioration in the operating environment. Since the Issuer Default Ratings (IDRs) of these banks are driven by their VRs, their Long-Term Foreign Currency (LT FC) and Local Currency (LT LC) IDRs have been downgraded to 'BB' from 'BB+'. Fitch has also revised these banks' Support Rating Floors (SRFs) to 'B+' from 'BB-', reflecting the sovereign's reduced capacity to support them. Their Support Ratings (SRs) were also downgraded to '4' from '3'. The Short-Term Local Currency (ST LC) and Short-Term Foreign Currency (ST FC) IDRs of these banks were affirmed at 'B'. The outstanding debt (senior and subordinated) ratings of the above mentioned institutions were also downgraded by the same magnitude as their LT FC IDRs. Fitch has also assigned IUH's upcoming issuance of Tier I unsecured subordinated notes an expected rating of 'B(EXP)'. The final rating is contingent on the receipt of final documents conforming to the information received to date. The notes will be issued by IUH's Grand Cayman branch for a principal amount and interest rate that will be determined at the time of the issuance. The notes will have no fixed maturity date as they are perpetual securities; however, the notes may be redeemed at IUH's option on or after the fifth year anniversary of this issuance. KEY RATING DRIVERS VRs, IDRs, SRs, SRFs, SENIOR and SUBORDINATED DEBT The rating actions follow Fitch's recent downgrade of Brazil's sovereign rating to 'BB-'/Outlook Stable from 'BB'/Outlook Negative and the revision of the Country Ceiling to 'BB' from 'BB+' (see 'Fitch Downgrades Brazil's Ratings to 'BB-'; Revises Outlook to Stable' at 'www.fitchratings.com'), and the consequent rating action on Brazil's sub-national governments (see 'https://www.fitchratings.com/site/pr/10022674' at 'www.fitchratings.com'). Fitch didn't take any actions on the National Scale Ratings of these entities because in the agency's opinion, the local relativities remain unchanged. Fitch uses IUH's VR as the anchor rating for the expected rating of its upcoming Tier 1 issuance. Due to the high loss-absorbing features of this subordinated, perpetual and unsecured issuance, Fitch's baseline scenario is that these securities will be notched -4 from the VR anchor (-2 for loss severity, plus -2 for non- performance risk). However, Fitch's criteria factors in compression, as IUH's VR is non-investment grade, providing some room for a narrower notching. Therefore, the overall notching for these securities is -3. The notes have the option to defer coupon payments on a non- cumulative basis subject to certain conditions being met, and are subject to write-down if common equity Tier 1 (CET1) ratio falls below 5.125%. In Fitch's view, both the loss severity and the non- performance risk of these securities are relatively higher than the outstanding and legacy IUH's T2 hybrid securities. RATING SENSITIVITIES IDRS, SENIOR DEBT IUH and IU's IDRs and senior debt ratings are sensitive to a change in Fitch's assumptions around specific issuer rating factors and rating factors affecting the sovereign. Any further changes to the sovereign rating or outlook could lead to a change in their ratings. VR IUH and IU's VRs are sensitive to a change in Fitch's assumptions regarding the bank's rating factors. The VR could be downgraded if the bank's loss absorption capacity diminishes. In the unlikely event that the issuer's FCC falls below 9%, or there is a sustained decrease in ROAA below 1.25% and over-90-day NPL ratios are above 6%, a ratings review would be triggered. SUPPORT RATING AND SUPPORT RATING FLOOR SR is potentially sensitive to any change in assumptions around the propensity or ability of the sovereign to provide timely support to the bank. SUBORDINATED DEBT AND OTHER HYBRID SECURITIES IUH's subordinated debt ratings are broadly sensitive to the same considerations that might affect IUH's VR. Fitch has taken the following rating actions: IUH -- Long-Term Foreign and Local Currency IDRs downgraded to 'BB'/Outlook Stable from 'BB+'/Outlook Negative; -- Short-Term Foreign and Local Currency IDRs affirmed at 'B'; -- Viability Rating downgraded to 'bb' from 'bb+'; -- Support Rating downgraded to '4' from '3'; -- Support Rating Floor revised to 'B+' from 'BB-'; -- Senior USD notes due 2018, Long-Term Foreign Currency downgrade to 'BB' from 'BB+'; -- Subordinated USD notes due 2020-2023 Long-Term Foreign Currency downgraded to 'B+' from 'BB-'; -- Subordinated perpetual T1 notes downgraded to 'B' from 'B+'; -- New issuance of subordinated perpetual T1 notes assigned 'B(EXP)'. Itau Unibanco -- Long-Term Foreign and Local Currency IDRs downgraded to 'BB'/Outlook Stable from 'BB+'/Outlook Negative; -- Short-Term Foreign and Local Currency IDRs affirmed at 'B'; -- Viability Rating downgraded to 'bb' from 'bb+'; -- Support Rating downgraded to '4' from '3'; -- Support Rating Floor revised to 'B+' from 'BB-'. ITAU UNIBANCO: Moody's Rates Add'l. Tier 1 Cap. Securities B2(hyb) ------------------------------------------------------------------ Moody's Investors Service has assigned a B2(hyb) rating to the proposed perpetual, non-cumulative, non-convertible, non-viability Additional Tier 1 capital securities to be issued by Itau Unibanco Holding S.A. (Cayman Islands) (IUH) under the company's (P)B2 MTN Program. The notes, which will have an optional redemption on the first call date in fifth year, are Basel III-compliant, and the terms and conditions have been defined with the purpose of qualifying the instrument as Additional Tier 1 capital pursuant to Brazilian regulations. The rating is subject to receipt of final documentation, the terms and conditions of which are not expected to change in any material way from the draft documents that Moody's has reviewed. The following ratings were assigned to Itau Unibanco Holding S.A. (Cayman Islands): Foreign currency preferred non-cumulative securities debt rating of B2(hyb) RATINGS RATIONALE The B2(hyb) rating assigned to the notes is positioned three notches below the (P)Ba2 senior unsecured program and Ba2 local- currency deposit ratings of Itau Unibanco S.A. (IU) and two notches below Itau Unibanco Holding S.A.'s Ba3 issuer rating and IUH's Ba3 senior unsecured, and plain vanilla subordinated debt ratings, in line with Moody's standard notching guidance for non- cumulative preferred securities with a full or partial principal write-down triggered at or close to the point of non-viability. IUH is the holding company of IU, which accounts for 99% of its parent's revenues. In addition to structural subordination to IU's senior debt, the B2(hyb) rating considers the capital securities' higher probability of default related to the potential that the coupon payment could be suspended and/or the principal could be written down prior to a failure of the bank. Under the terms of the notes, principal will be fully written down in the event that (i) IUH's regulatory Common Equity Tier 1 capital ratio is equal or falls below 5.125%; (ii) if a public sector capital injection -- or equivalent support -- would otherwise be necessary to maintain the bank as a going concern (ii) if Brazilian Central Bank determines at its sole discretion that a write-down is necessary to maintain the bank as a going concern, or (iii) if the Central bank temporarily assumes control of the bank or, otherwise, intervenes in it. Moody's considers a CET1 ratio of 5.125% to be at or close to a bank's point-of-non- viability. Moody's note that Brazil's minimum required CET1 ratio is 4.5%. In December 2017, however, IUH reported a CET1 ratio of 16.2%, which was 11.075% above the write-down trigger. Even after factoring in various reductions to the bank's capital that will occur in 2019 related to the final phase-in of Basel III prudential adjustments, the payment of an extraordinary dividend, and the acquisition of broker XP Investimentos, its CET1 will remain a substantial 7.775% over the PONV. Nevertheless, because the notes will not be written down until the bank is at or near the expected point of non-viability, they do not meaningfully reduce the probability of the bank's failure. Hence, as with most AT1 capital securities (excepting those with particularly high write-down or equity conversion triggers), Moody's does not accord them any capital credit and the bank's standalone credit profile, which is in any case constrained by Brazil's sovereign rating, will not benefit from the issuance. The securities also include a mandatory coupon skip mechanism, which is non-cumulative, if (i) the bank does not have sufficient distributable profits and accumulated profit reserves to make the coupon payment; (ii) the bank defaults and/or the regulator imposes any restriction on the payment of dividends; or (iii) the coupon payment would result in the bank's capital ratio falling below the minimum regulatory requirements for Common Equity Tier 1 Capital, Tier 1 Capital and Regulatory Capital. The notes (i) will be subordinated in rights of payment to all IUH's existing and future senior to Tier 1 liabilities, (ii) will be junior to all other present or future "preferred" subordinated indebtedness, (iii) will rank pari passu with all other existing and future Tier 1 liabilities and (iv) will be senior to Common Equity Tier 1 Capital. WHAT COULD CHANGE THE RATINGS UP OR DOWN In line with the negative outlooks on IUH's senior debt ratings, and on Brazil's sovereign bond rating, the rating assigned to the notes would face downward pressure if Brazil's sovereign rating is downgraded. Upward pressure on the rating assigned to the notes is unlikely at the current time given the negative outlook on IUH's senior debt rating. However, the outlook could be stabilized if Brazil's sovereign outlook returns to stable. PETROLEO BRASILEIRO: June 4 Securities Settlement Hearing Set ------------------------------------------------------------- If You Previously Purchased or Otherwise Acquired Certain Petrobras Securities, You Could Get a Cash Payment from a Class Action Settlement The following statement is being issued by Pomerantz LLP regarding In re Petrobras Securities Litigation. Important Legal Notice from the United States District Court for the Southern District of New York Two proposed settlements have been reached in a securities class action lawsuit brought by investors against Petroleo Brasileiro S.A. ("Petrobras") and certain of its affiliates, underwriters, external auditors, and current and former directors and officers. The Settlements include certain securities issued by Petrobras. Petrobras, the Underwriter Defendants, and PricewaterhouseCoopers Auditores Independentes ("PwC Brazil") deny any and all allegations of wrongdoing, and the District Court has not decided who is right. If you requested exclusion in response to the previously mailed notice of pendency of class action dated May 9, 2016, you are included in this Settlement, and you must request exclusion again if you do not want to be included in the Settlement Class. Am I included in the proposed Settlements? You are encouraged to visit the website www.PetrobrasSecuritiesLitigation.com to see if you are included in the Settlement Class. The Settlement Class includes all Persons who: (a) during the time Period between January 22, 2010 and July 28, 2015, inclusive (the "Class Period"), purchased or otherwise acquired Petrobras Securities, including debt securities issued by PifCo and/or PGF, on the New York Stock Exchange or pursuant to other Covered Transactions; and/or (b) purchased or otherwise acquired debt securities issued by Petrobras, PifCo, and/or PGF, in Covered Transactions, directly in, pursuant and/or traceable to a May 13, 2013 public offering registered in the United States and/or a March 10, 2014 public offering registered in the United States before Petrobras made generally available to its security holders an earnings statement covering a period of at least twelve months beginning after the effective date of the offerings (August 11, 2014 in the case of the May 13, 2013 public offering and May 15, 2015 in the case of the March 10, 2014 public offering). For purposes of the Settlements, "Covered Transaction" means any transaction that satisfies any of the following criteria: (i) any transaction in a Petrobras Security listed for trading on the New York Stock Exchange ("NYSE"); (ii) any transaction in a Petrobras Security that cleared or settled through the Depository Trust Company's book-entry system; or (iii) any transaction in a Petrobras Security to which the United States securities laws apply, including as applicable pursuant to the Supreme Court's decision in Morrison v. National Australia Bank, 561 U.S. 247 (2010). The full definition of the Settlement Class, as well as full lists of Petrobras Securities eligible to satisfy criteria (i), (ii), and (iii) are available at: www.PetrobrasSecuritiesLitigation.com. What do the Settlements provide? Petrobras, the Underwriter Defendants, and PwC Brazil have agreed to Settlements with a combined value of US$3 billion (US$3,000,000,000.00). The proposed settlement could provide for a cash payment depending upon: which securities you purchased or acquired; the number of eligible securities that you purchased or acquired; and when you purchased or acquired the eligible securities. How can I get a Payment? You must submit a Proof of Claim to receive payment postmarked or submitted by June 9, 2018. Visit the website and file a Proof of Claim online, or download one and file by mail. What are my other options? If you do not want to be legally bound by the Settlement, you must exclude yourself by submitting a written Request for Exclusion Form so that it is received no later than April 27, 2018. If you do not exclude yourself, you will release any claims you may have against Petrobras, the Underwriter Defendants, and PwC Brazil and certain other Released Parties. You may object to the Settlement by submitting a written objection so that it is received no later than May 11, 2018. You cannot both exclude yourself from, and object to, the Settlement. The longer Notice available on the website listed below explains how to exclude yourself or object. The court will hold a Settlement Hearing on June 4, 2018 to consider whether to finally approve the Settlement and a request for attorneys' fees of up to 9.5% of the total Settlement Amount, which is $285,000,000.00, and a compensatory award of up to $400,000 for the Class Representatives. You may appear at the Settlement Hearing, either by yourself or through an attorney hired by you, but you do not have to. For more information, including the relief, eligibility, and release of claims, call the number or visit the website below. Contact: 1-855-907-3218 www.PetrobrasSecuritiesLitigation.com Jeremy A. Lieberman, Esq., 212-661-1100 ========= C H I L E ========= SMU SA: Moody's Alters Outlook to Positive; Affirms B3 CFR ---------------------------------------------------------- Moody's Investors Service has revised SMU S.A. (SMU)'s outlook to positive from stable and affirmed its B3 corporate family rating and the B3 rating on its USD300 million senior unsecured notes due 2020. RATINGS RATIONALE The change on SMU's outlook to positive from stable primarily reflects the clear advances in the company's operating performance and credit metrics over the last several quarters driven both by liquidity events and the ongoing improvement in operating performance. Accordingly, the company completed capital increases in January and November 2017 for about USD350 million. In addition, SMU expects to sell Construmart, a subsidiary that the company has identified as non-core, for about USD75 million by mid-2018. The company has already signed a binding agreement for the sale and is awaiting regulatory approval to finalize the transaction. Moody's expect such initiatives to be fully incorporate in SMU's balance sheet by 1H18. Leverage measured by adjusted debt/EBITDA reduced to 6.2x in the LTM ended September 2017 (from 10.9x in 2014) and an adjusted EBITDA margin reached 8.1% (versus 5.5%) in the same period. Going forward, Moody's expect further -- additional improvements in credit metrics, with Adjusted Debt/Ebitda ratio to reach 5.2x and 4.8x as of 2018 and 2019 respectively. The company has been also improving its operating performance following the implementation of a number of efficiency measures under its updated "Triennial Plan" in 2014-6. For 2017-19 SMU's new profitability strategy plan, known as CIMA, continues to aim for profitable and sustainable organic growth in six strategic pillars: customer experience; operating efficiency; organizational excellence; sustainability; technological development; and strengthening its financial position. Operating margins have increased to 4.8% as of LTM ended September 2017 from 1.5% as of December 2014. Going forward, Moody's expect stability in operating results, with room for further marginal improvements. SMU's liquidity is still tight, with cash on hand covering only about 40% of its short term debt as of September 2017, despite the recovery in cash generation since 2015. Moody's considers that a low liquidity cushion exposes the company to high refinancing risk and leaves it vulnerable in case of any potential external shocks. SMU's ratings are supported by the company's exposure to the defensive food industry through its extensive supermarket footprint in Chile, which potentially reduces revenue and margin volatility. Although Moody's acknowledges the company's improvements during the last quarters, SMU's B3 ratings are constrained by the company's weak liquidity position, amidst a competitive operating environment. An upgrade could occur over time if SMU continues to improve its overall credit metrics, cash generation and operational performance. A positive rating action would also be dependent on an improvement in the company's liquidity profile. Quantitatively, an upgrade would also require leverage ratios below 5 times and interest coverage of at least 2.25x on a sustained basis. On the other hand, the ratings could be downgraded in case of deterioration in SMU's credit metrics, operating performance or liquidity. The principal methodology used in these ratings was Retail Industry published in October 2015. Based in Santiago, Chile, SMU is a diversified retailer with operations across the entire country and Peru. The company's multi-brand and multi-sector strategy focuses on supermarkets, wholesale, convenience stores and e-grocery outlets, as well as a construction materials business that is currently held for sale. As of last twelve months ended September 30, 2017 SMU reported total revenues of approximately USD3.8 billion. ============= J A M A I C A ============= CABLE & WIRELESS: Asks Change of Period for Suspension of Trading ----------------------------------------------------------------- RJR News reports that Cable & Wireless Jamaica (CWJ) has requested a change of period for suspension of trading in CWJ Shares. The current suspension of CWJ shares began on March 5 and is scheduled to end on March 22, according to RJR News. However, CWJ is seeking to change the end date to March 20 to facilitate the earlier execution of the block transfer of shares which accepting shareholders have agreed to sell to CWJ Cala Holdings, the report notes. The transfer is part of the process which will involve Cala Holdings acquiring all of CWJ shares it does not currently hold, the report relays. The process is being challenged by minority shareholder Jason Abrahams, the report adds. As reported in the Troubled Company Reporter-Latin America on Aug. 11, 2017, S&P Global Ratings assigned its 'B' issue-level rating to C&W Senior Financing Designated Activity Company's proposed $700 million senior notes due 2027. This company is an orphan special purpose vehicle (SPV) in the Cable & Wireless structure (Cable & Wireless Communications Limited [CWC]; BB-/Negative/B). The SPV will give the notes proceeds to Sable International Finance Limited (SIFL), a CWC's subsidiary, and from there the group will refinance in full Columbus International's $605 million 7.375% senior notes due December 2021; pay $45 million in transaction related premiums, fees and expenses; and keep $40 million for general corporate purposes. JAMAICA: Deposit Taking Institutions Keeping Lid on NPL ------------------------------------------------------- RJR News reports that new data show the island's deposit taking institutions have been keeping a lid on non-performing loans. The recently tabled Bank of Jamaica annual report for 2017 shows the loan quality as measured by the ratio of non-performing loans to total loans improved as at the end of September 2017, according to RJR News. In particular, the ratio of nonperforming loans to total loans for deposit taking institutions decreased to 2.7 per cent at the end of September last year relative to 3 per cent at the end of 2016, the report notes. The Central Bank says the continued improvement in loan quality was primarily reflected in non-performing loans for the construction, mining and manufacturing sectors which together accounted for 7.6 per cent of total loans, the report adds. As reported in the Troubled Company Reporter-Latin America on Feb. 5, 2018, Fitch Ratings has affirmed Jamaica's Long-Term Foreign-Currency Issuer Default Rating (IDR) at 'B' and has revised the Rating Outlook to Positive from Stable. =========== M E X I C O =========== MEXICO: Candidate Plots Big Shake Up for Country's Oil Industry --------------------------------------------------------------- Robbie Whelan at The Wall Street Journal reports that the front- runner in July's presidential election wants to upend Mexico's newly-opened energy sector. Andres Manuel Lopez Obrador, a leftist nationalist with a comfortable lead in the polls, has rattled investors by calling for a temporary freeze in new private investment in exploration and production of oil, according to The Wall Street Journal. But it is his plan to shift federal spending to refining from exploration and production that critics say could have the most dramatic consequences for the Mexican economy and U.S. refineries along the U.S. Gulf Coast, the report notes. Eventually, Mr. Lopez Obrador wants to completely halt exports of crude oil--a critical source of revenue for the country--because Mexico has become too dependent on the U.S. for refined gasoline, said Rocio Nahle, a congresswoman from his Morena party whom the candidate has named as his Secretary of Energy should he win, the report relays. "We're going to change the energy policy of this country, that's a fact," Ms. Nahle said in an interview with The Wall Street Journal. Energy analysts, rival politicians and former employees of state oil company Petroleos Mexicanos, or Pemex, say that Mr. Lopez Obrador's plan would throw Mexico's energy-dependent economy back to the days of the early 1970s, before key oil discoveries were made and when the country relied on a closed economy in key industries such as oil, steel and agriculture, the report relays. The refinery plan could also have broad fiscal consequences for Mexico, leading to a potential budget shortfall, the report relays. For the U.S., which buys half of Mexico's crude exports, it could force refineries along the U.S. Gulf Coast that rely on Mexican crude to look elsewhere, the report notes. Mr. Lopez Obrador has a long history of opposing the opening of Mexico's oil industry to foreign and private investment, the report relays. In 2013, he led thousands of street marchers in protests against President Enrique Pena Nieto's plan to allow private investment in exploration and production, calling the idea of sharing the benefits of Mexican natural resources with foreign oil companies an affront to national sovereignty, the report discloses. "It's common sense. Why don't we add value to our resources? Why do we have to buy gasoline?" Mr. Lopez Obrador said, the report says. "By the middle of the next presidential term, we're going to stop buying gasoline, we're going to produce gasoline in Mexico," he added. Mr. Lopez Obrador's top rivals favor keeping Mexico's energy sector open and focused on exports, the report relays. For the past few decades, successive Mexican governments have invested their limited dollars in exploring and producing crude oil for export, with far less attention given to downstream activities like refining, the report notes. The reason is simple: the payoff from finding crude oil is large, whereas refining has very small margins and requires massive investment, the report discloses. Gasoline imports have surged in the last decade as demand for auto fuel grows and as Mexico's six existing refineries have become less productive, dogged by inefficiencies, unplanned shutdowns and damage caused by natural disasters, the report notes. Mexico imported 571,000 barrels of gasoline a day in 2017, an average rate that was 59% higher than in 2013, the report relays. Meanwhile, 2017 was the worst year for domestic gasoline production in over a decade, with just 257,000 barrels refined a day, down 44% from a decade earlier, the report relays. Pemex's six refineries were operating at an average capacity of 48% last year, the lowest level on record, the report adds. Mr. Lopez Obrador wants to build one or two new refineries, which would each cost about $6 billion and take approximately three years to construct, said Ms. Nahle, a petroleum engineer who worked at Pemex petrochemical plants in the 1980s, the report relays. In addition, she said he wants to upgrade all six existing Mexican refineries, getting them running at between 70% and 95% capacity within nine months, the report relays. "If you've got money to spend on either refining or exploration and production, why wouldn't you spend it on E&P, where you'll make a lot more money?" said Duncan Wood, director of the Mexico Institute at the Woodrow Wilson International Center for Scholars, the report notes. "Clearly the calculus is a political one," Mr. Wood said, notes the report. "They want shiny new plants on shore that the president can stand in front of and say, 'Look, we made this,'" he added. The Lopez Obrador plan would likely take away resources needed to protect Mexico's declining production of crude oil for export, the report relays. Pemex contributes nearly 20% of Mexico's federal budget, the report notes. Mexico exported $20 billion dollars of crude oil last year, at an average of 1.17 million barrels a day, about half of it to the U.S. Crude export volumes have fallen by more than 30% in the last decade as several key Mexican oil fields have become tapped out. To try to offset that decline, the country opened its exploration and production to private investment in 2013, the report notes. Since then, the country has held eight auctions and awarded 91 exploration and production contracts, the report says. But many of these will take years or even decades to yield significant amounts of crude, the report relays. The cost of upgrading and building new refineries is likely to be far higher than what the campaign estimates, analysts said, notes the report. The price tag for a new refinery, at about $10-$12 billion, is likely to be much higher than Lopez Obrador campaign is projecting, according to Gonzalo Monroy, an independent energy consultant in Mexico City, the report says. Mexico last built a new refinery, its massive Salina Cruz facility in Oaxaca State, in 1980, the report discloses. Recent upgrades at the Pemex's Minatitlan and Cadereyta refineries were plagued by cost overruns, the report relays. One obstacle to improving productivity at the refineries is Pemex's 130,000 unionized workers, whose efficiency badly trails international standards, the report notes. "You'd have to carry out major reforms and dramatically modify existing labor practices, or else it's not worth it" to upgrade Mexico's refineries, said Adrian Lajous, who headed Pemex from 1995 to 1999, the report relays. Ultimately, the plan makes sense if Mexico can produce gasoline more efficiently than what it costs bringing in gasoline from Texas, the report notes. "You are basically asking Mexico . . . to compete with the world's most efficient oil refiners, which are the ones on the U.S. Gulf Coast," said Pablo Medina, an analyst with the Houston firm Welligence, adds the report. "Just for the sake of being energy independent, I'm not sure the price is right." =========== P A N A M A =========== PANAMA: Second Most Important City Paralyzed by Protests -------------------------------------------------------- EFE News reports that the city of Colon, the second largest producer of wealth in Panama, was paralyzed by a civic protest with outbreaks of vandalism that began before sunrise, even though the government says it is investing more than $1 billion in urban improvements here. The leader of the protest movement, Edgardo Voitier, told reporters that the mobilization is "peaceful" but demands far- reaching solutions to the breakdown of services like healthcare and public schools, according to EFE News. The Broad Front for Colon (FAC), a platform that brings together a number of civic organizations, launched a protest in the Caribbean city against the urban renovation promoted by the Panamanian government and which, it says, is a cover-up for a gentrification process, the report notes. "There are multiple reasons why they won't get us out of the streets, but what mainly motivates us is the perverse aim of Panamanian President Juan Carlos Varela to use our money to kick poor people out of the city and hand it over to the rich," FAC coordinator Edgardo Voitier told EFE hours before. The report says that the government's plan, the civic leader said, is to "privatize Colon and make it the home of the elite," as occurred in the historic downtown area of the Panamanian capital, so the only people who can live there are "the rich and the foreign." For his part, the secretary of presidential goals, Jorge Gonzalez, said on TVN News that "more than $1 billion is being invested" in construction works in Colon, and denied that people are being "kicked out of the city" to create spaces for the well-to-do, the report notes. The report relays that Mr. Gonzalez regretted that in the early hours the iconic Casa Wilcox in old Colon was reduced to ashes, burned down by vandals who were not associated with the FAC, and warned that the building "will be reconstructed" and repopulated by the 45 families who were living there, which is its total capacity. The contract for renovating Colon was awarded in June 2015 to the Nuevo Colon consortium, made up of Brazil's Odebrecht and Panama's Constructora Urbana (CUSA), for $537 million, though the final cost is expected to be higher, the report says. The city of Colon, located on the Caribbean coast and 80 kilometers (50 miles) north of the capital, is one of the poorest, most conflicted in the country, even though it includes the Free Trade Zone and has important ports, as well as the Atlantic entry to the Panama Canal and an enormous natural gas plant under construction, the report adds. ======= P E R U ======= INRETAIL CONSUMER: S&P Cuts CCR to 'BB' Then Withdraws Rating ------------------------------------------------------------- S&P Global Ratings lowered its corporate credit rating on InRetail Consumer (IC) to 'BB' from 'BB+' and removed the rating from CreditWatch, where S&P placed it with negative implications on Jan. 30, 2018. S&P subsequently withdrew the rating on IC at its request. At the time of the withdrawal, the outlook was stable. The downgrade of IC reflects the expected deterioration of the company's pro forma leverage metrics due to the incremental debt it is raising to fund its proposed $583 million acquisition of Quicorp. S&P said, "We believe that the combination of Quicorp with IC's operations will improve its business in the pharma division by increasing its scale and purchasing power with suppliers in Peru, and bolster IC's international expansion. However, we don't believe that this improvement is sufficient enough to offset the increase in the company's debt burden. We expect IC's leverage to remain above 4x by the end of 2018 on a pro forma basis. "The stable outlook reflected our expectations that IC will rapidly integrate Quicorp, which would improve the latter's operating performance. The outlook also incorporated our expectations of IC's deleveraging strategy in the next few years, reaching a debt-to-EBITDA ratio below 4.0x in 2019." ====================== P U E R T O R I C O ====================== AMADO SALON DE BELLEZA: Taps Justiniano's Law Office as Attorney ---------------------------------------------------------------- Amado Salon De Belleza Inc. seeks authority from the United States Bankruptcy Court for the District of Puerto Rico (Old San Juan) to hire Gloria M Justiniano Irizarry, Esq. and Justiniano's Law Office as attorneys. Services to be rendered by Ms. Justiniano are: -- examine documents of the Debtor and other necessary information to submit schedules and Statement of Financial Affairs; -- prepare the Disclosure Statement, Plan of Reorganization, records and reports as required by the Bankruptcy Code and the Federal Rules of Bankruptcy Procedure; -- prepare applications and proposed orders to be submitted to the Court; -- identify and prosecute of claims and causes of action assert able by the debtor-in-possession on behalf of the estate; -- examine proof of claims filed and to be filed in the case and the possible objections to certain of such claims; -- advise the debtor-in-possession and prepare documents in connection with the ongoing operation of Debtor's business; -- advise the debtor-in-possession and prepare documents in connection with the liquidation of the assets of the estate, if needed, including analysis and collection of outstanding receivables; and -- assist and advise the debtor-in-possession in the discharge of any and all the duties imposed by the applicable dispositions of the Bankruptcy Code and the Federal Rules of the Bankruptcy Procedure. Justiniano's hourly rates are: Attorney $250 Associates $125 Paralegal $50 Gloria M. Justiniano attests that she and each member of her firm is a "disinterested person" as that term is defined in 11 U.S.C. Sec. 101(14). The counsel can be reached through: Gloria M Justiniano Irizarry, Esq. Justiniano's Law Office Ensanche Martinez Calle A Ramirez Silva #8 Mayaquez, PR 0068-4714 Phone: (787) 222-9272 & 805-2945 E-mail: Justinianolaw@gmail.com About Amado Salon De Belleza Based in Guaynabo, Puerto Rico, Amado Salon De Belleza Inc. filed a Chapter 11 petition (Bankr. D.P.R. Case No. 14-10460) on Dec. 23, 2014. The case is assigned to Judge Edward A. Godoy. At the time of filing, the Debtor disclosed $488,861 in total assets and $1.38 million in total liabilities. The Debtor is represented by Gloria M. Justiniano at Justiniano's Law Office as counsel. PRWIRELESS INC: S&P Withdraws 'CCC-' Corporate Credit Rating ------------------------------------------------------------- On March 12, 2018, S&P Global Ratings withdrew its 'CCC-' corporate credit rating on San Juan, P.R.-based PRWireless Inc. at the company's request. At the same time, S&P withdrew the 'CCC-' issue-level ratings on the company's senior secured debt, also at the company's request. TOYS R US: Taps Frontline Real Estate as Real Estate Advisor ------------------------------------------------------------ Girafee Holdings, LLC, Giraffe Junior Holdings, LLC, and Toys "R" Us seek authority from the U.S. Bankruptcy Court for the Eastern District of Virginia to hire Frontline Real Estate Partners, LLC, as their real estate advisor. Services to be provided by Frontline are: a. discuss the Applicant's goals, objectives, and expectations with respect to the properties in their real estate portfolio; b. review all information provided by the Applicants, including, but not limited to building specs, lease documents, and rent schedules; c. analyze each property in the portfolio, including a study on their subject markets and trade areas to determine market lease rates and property values for each location; d. provide the Applicants with perspective on market value and market rents for each property along with restructuring strategies to achieve the best outcome. The level of detail of detail and reporting for each site will determined by the Applicants' needs; e. advise the Applicants throughout the lease resturcturing process; and f. provide the Applicants with such other real estate advisory services as may be required in connection with Conflict Matters. Hourly rates for Frontline are: Partner $500 Vice President $300 Associate $150 Mitchell P. Khan, CEO of Frontline Real Estate Partners, attests that Frontline is a "disinterested person" within the meaning of Section 101(14) of the Bankruptcy Code and does not hold or represent an interest adverse to the Debtor's estate. The firm can be reached through: Mitchell P. Khan Joshua Joseph Frontline Real Estate Partners, LLC 477 Elm Place Highland Park, IL 60035 Tel: (847) 780-8060 Email: mkhan@frontlineREpartners.com jjoseph@frontlineREpartners.com About Toys "R" Us Toys "R" Us, Inc., is an American toy and juvenile-products retailer founded in 1948 and headquartered in Wayne, New Jersey, in the New York City metropolitan area. Merchandise is sold in 880 Toys "R" Us and Babies "R" Us stores in the United States, Puerto Rico and Guam, and in more than 780 international stores and more than 245 licensed stores in 37 countries and jurisdictions. Merchandise is also sold at e-commerce sites including Toysrus.com and Babiesrus.com. On July 21, 2005, a consortium of Bain Capital Partners LLC, Kohlberg Kravis Roberts and Vornado Realty Trust invested $1.3 billion to complete a $6.6 billion leveraged buyout of the company. Toys "R" Us is a privately owned entity but still files with the Securities and Exchange Commission as required by its debt agreements. The Company's consolidated balance sheet showed $6.572 billion in assets, $7.891 billion in liabilities, and a stockholders' deficit of $1.319 billion as of April 29, 2017. Toys "R" Us, Inc., and certain of its U.S. subsidiaries and its Canadian subsidiary voluntarily filed for relief under Chapter 11 of the Bankruptcy Code (Bankr. E.D. Va. Lead Case No. Case No. 17-34665) on Sept. 19, 2017. In addition, the Company's Canadian subsidiary voluntarily commenced parallel proceedings under the Companies' Creditors Arrangement Act ("CCAA") in Canada in the Ontario Superior Court of Justice. The Company's operations outside of the U.S. and Canada, including its 255 licensed stores and joint venture partnership in Asia, which are separate entities, are not part of the Chapter 11 filing and CCAA proceedings. Grant Thornton is the monitor appointed in the CCAA case. Judge Keith L. Phillips presides over the Chapter 11 cases. In the Chapter 11 cases, Kirkland & Ellis LLP and Kirkland & Ellis International LLP serve as the Debtors' legal counsel. Kutak Rock LLP serves as co-counsel. Toys "R" Us employed Alvarez & Marsal North America, LLC as its restructuring advisor; and Lazard Freres & Co. LLC as its investment banker. It hired Prime Clerk LLC as claims and noticing agent. A&G Realty Partners, LLC, serves as its real estate advisor. On Sept. 26, 2017, the U.S. Trustee for Region 4 appointed an official committee of unsecured creditors. The Committee retained Kramer Levin Naftalis & Frankel LLP as its legal counsel; Wolcott Rivers, P.C. as local counsel; FTI Consulting, Inc. as financial advisor; and Moelis & Company LLC as investment banker. ================= V E N E Z U E L A ================= VENEZUELA GLOBAL: Moody's Cuts Depository Receipts Rating to C -------------------------------------------------------------- Moody's Investors Service announced that it has downgraded the ratings on the following receipts issued by Venezuela Global Bond Programme: Venezuela Global Bond Coupon Depository Receipts, Downgraded to C; previously on January 16, 2015 Downgraded to Caa3 Venezuela Global Bond Coupon Strip Depository Receipts, Downgraded to C; previously on January 16, 2015 Downgraded to Caa3 Venezuela Global Bond Long Term Coupon Depository Receipts, Downgraded to C; previously on January 16, 2015 Downgraded to Caa3 Venezuela Global Bond Principal Depository Receipts, Downgraded to C; previously on January 16, 2015 Downgraded to Caa3 RATINGS RATIONALE The rating action is a result of the change in the rating of the Republic of Venezuela 9.25% U.S. Dollar-Denominated Unsecured Global Bonds due 2027 ("Underlying Securities"), whose Caa3 rating was downgraded to C on March 9, 2018. The depository receipts are structured notes whose ratings are based on the rating of the Underlying Securities and the legal structure of the transaction. Methodology Underlying the Rating Action The principal methodology used in these ratings was "Moody's Approach to Rating Repackaged Securities" published in June 2015. Factors that would lead to an upgrade or downgrade of the ratings: The ratings of the depository receipts will be sensitive to any change in the rating of the Republic of Venezuela 9.25% U.S. Dollar-Denominated Unsecured Global Bonds due 2027. *********** Monday's edition of the TCR-LA delivers a list of indicative prices for bond issues that reportedly trade well below par. Prices are obtained by TCR-LA editors from a variety of outside sources during the prior week we think are reliable. Those sources may not, however, be complete or accurate. The Monday Bond Pricing table is compiled on the Friday prior to publication. Prices reported are not intended to reflect actual trades. Prices for actual trades are probably different. Our objective is to share information, not make markets in publicly traded securities. Nothing in the TCR-LA constitutes an offer or solicitation to buy or sell any security of any kind. It is likely that some entity affiliated with a TCR-LA editor holds some position in the issuers' public debt and equity securities about which we report. Tuesday's edition of the TCR-LA features a list of companies with insolvent balance sheets obtained by our editors based on the latest balance sheets publicly available a day prior to publication. At first glance, this list may look like the definitive compilation of stocks that are ideal to sell short. Don't be fooled. Assets, for example, reported at historical cost net of depreciation may understate the true value of a firm's assets. A company may establish reserves on its balance sheet for liabilities that may never materialize. The prices at which equity securities trade in public market are determined by more than a balance sheet solvency test. Submissions about insolvency-related conferences are encouraged. Send announcements to conferences@bankrupt.com *********** S U B S C R I P T I O N I N F O R M A T I O N Troubled Company Reporter-Latin America is a daily newsletter co-published by Bankruptcy Creditors' Service, Inc., Fairless Hills, Pennsylvania, USA, and Beard Group, Inc., Washington, D.C., USA, Marites O. Claro, Joy A. Agravante, Rousel Elaine T. Fernandez, Julie Anne L. Toledo, Ivy B. Magdadaro, and Peter A. Chapman, Editors. Copyright 2018. All rights reserved. ISSN 1529-2746. This material is copyrighted and any commercial use, resale or publication in any form (including e-mail forwarding, electronic re-mailing and photocopying) is strictly prohibited without prior written permission of the publishers. Information contained herein is obtained from sources believed to be reliable, but is not guaranteed. The TCR Latin America subscription rate is US$775 per half-year, delivered via e-mail. Additional e-mail subscriptions for members of the same firm for the term of the initial subscription or balance thereof are US$25 each. For subscription information, contact Peter A. Chapman at 215-945-7000. . * * * End of Transmission * * *